17 Mar
2020

Trademark procedures and strategies: El Salvador

Romero Pineda & Asociados

Legal framework

National law

The main regulations of the 2002 Trademarks Law (as amended in 2006) provide for the following:

  • protection for well-known trademarks;
  • protection for three-dimensional marks and trade dress;
  • new trademark examination rules;
  • a six-month term for abandoning an application;
  • coexistence agreements for similar marks;
  • the registration of appellations of origin;
  • the division of registrations based on the goods covered;
  • the limitation of goods in a pending application or registered mark;
  • co-ownership of a mark; and
  • the extension and limits of trademark rights.

Only previously registered trademarks are subject to opposition on renewal. Marks are protected for 10 years, and are renewable every 10 years. An additional advantage is the inclusion of clear and simple rules for calculating damages. The law has its own statute of limitations rules, which prevail over the Code of Commerce’s general provisions.

Trademarks are protected through registration at the Registry of Intellectual Property (RIP). Priority can be claimed according to the Paris Convention. The 11th edition (2020) of the Nice Convention for the International Classification of Goods and Services applies.

In February 2019 the Administrative Procedures Law became effective to uniform procedures and recourses across the executive branch. The new law affects many procedures managed by the RIP, benefiting trademark holders providing certainty, shorter terms for government officials resolve petitions filed, extensions of time to file documents and setting sanctions to government officials not observing the new terms, among other things.

International law

El Salvador is a signatory to the following international trademark treaties and agreements:

  • the Paris Convention;
  • the Agreement on Trade-Related Aspects of Intellectual Property Rights;
  • the Dominican Republic-Central America Free Trade Agreement with the United States (DR-CAFTA). To comply with it, El Salvador made a number of amendments to its trademark law, including:
    • extending protection to sound, smell and certification marks;
    • providing that certification marks cannot be seized, embargoed or subject to preliminary injunctions or judicial execution;
    • should a certification mark not be renewed or be abandoned, or should the public entity owning it cease to exist, an identical mark cannot be registered or used by another party for 10 years;
    • making the recordal of licence agreements optional – coexistence agreements will be approved as signed by the parties; and
    • requiring that notices of publication in both the Official Gazette and major newspapers outline the list of goods and services covered;
  • the Trademark Law Treaty, which implemented the following in El Salvador:
    • multi-class applications and registrations;
    • division of application or registration – an applicant can divide the application to defend an opposition and continue the registration process in the other classes;
    • address and name changes – proof of such changes is no longer required in submitting a recordal application, unless the IP registrar has reason to doubt such changes; and
    • power of attorney – this need not be notarised or legalised, unless judicial actions are being pursued; and
  • the Association Agreement between the European Union and Central America, which focuses on protection for geographical indications and appellations of origin.

Unregistered marks

Protection

Rights in unregistered marks arise only where the relevant mark is sufficiently well known and this can be proved. Such marks may be enforced through an opposition process against identical or similar marks or through an unfair competition action filed before a civil and mercantile court. Criminal actions are available in cases involving criminal responsibility or cybercrimes affecting trademarks. Complaints are filed before the General Attorney’s Office, which will investigate and file an action before a criminal court.

Use requirements

El Salvador is a first-to-file jurisdiction; therefore, no rights emerge from merely using a mark without filing an application. The Trademarks Law does not specify how much use is required to establish unregistered rights. However, the following is helpful:

  • home and international registration certificates;
  • printed and online advertising;
  • television, radio, press, internet and social media exposure;
  • exposure of the mark to Salvadoran consumers;
  • an affidavit issued by an authorised officer explaining how the mark became well known; and
  • sales volumes, preferably certified by an auditor.

Registered marks

Ownership

Any natural or legal person can apply for and acquire the right to own a mark in El Salvador. No conditions of nationality, domicile or establishment apply.

A representative needs a power of attorney to act before the RIP, which must be notarised and legalised by apostille or alternatively before the nearest consulate. In the absence of this, a bond can be rendered to support temporary representation while a power of attorney is rendered; at the latest before the mark is granted.

Scope of protection

Not all trademarks or brand names are subject to registration. The Trademarks Law sets out grounds for refusal, both for intrinsic reasons (Article 8) and where the mark violates third-party rights (Article 9).

A mark is inadmissible for intrinsic reasons if it:

  • consists of the usual form of the goods for which registration is sought, or their packaging, or a form that is necessary due to the nature of the goods or services;
  • consists of a form that gives a functional or technical advantage to the goods or services for which registration is sought;
  • consists of a common or usual name, term or designation of the goods or services in usual technical, scientific or commercial language;
  • serves in trade to describe a characteristic of the goods or services;
  • is a simple, isolated colour;
  • totally or partially reproduces or imitates the name, code of arms, flag, emblem or abbreviation, official control symbol or warranty of any state or international organisation, without express authorisation;
  • reproduces coins or bills of legal tender, securities or other mercantile documents, fiscal seals, stamps or other fiscal species;
  • is a letter or digit separately considered, unless represented in special and distinguishing form;
  • is contrary to morality or public order;
  • includes elements that offend or ridicule people, ideas, religions or national symbols of any country or international organisation;
  • includes medals, awards or diplomas received, unless the fact can be evidenced on filing the application;
  • could mislead or cause confusion as to the geographical origin, nature, method of manufacture, qualities, aptitude for use or consumption, amount or some other characteristic of the goods or services; or
  • consists of the name of a protected vegetal variety in El Salvador or abroad.

In addition, a mark is inadmissible if, after examination, the registrar determines that it violates third-party rights – for example, if it:

  • is confusingly identical or similar to a third party’s mark that is registered or pending for goods or services related to those protected by a registered or pending mark;
  • is confusingly visually, phonetically, olfactorily or conceptually similar to a third party’s mark that is registered or pending for goods or services;
  • is confusingly identical or similar to a third party’s trade name or emblem already used in El Salvador for similar commercial activities;
  • constitutes a full or partial reproduction, imitation, translation or transcription of a third party’s well-known mark, where its use may cause confusion or a risk of association with the third-party mark or take unfair advantage of the notoriety of the well-known mark;
  • affects a third party’s personality rights or consists, fully or partially, of a third party’s name, signature, title, pseudonym or image, unless the third party or its heirs expressly grant consent;
  • is likely to cause confusion with a protected geographic indication or an appellation of origin for which protection has been applied before the examined application;
  • infringes any third party’s copyright or industrial property right, unless express consent is granted; or
  • is registered to consolidate or commit unfair competitive practices.

Procedures

Examination

An application will first be examined for compliance with the formal requirements and afterwards on novelty and to verify whether the mark falls under any of the prohibitions set out in Articles 8 and 9.

If the examining attorney states an observation that one or more formal requirements are not met, the applicant has 10 working days to respond. If the examiner maintains no compliance of requirements, the applicant can file a reconsideration recourse within 10 working days after receiving notice. If the resolution is favourable, the application is admitted; however, if it is not favourable, the RIP will issue a resolution declaring the mark’s dismissal – no further recourse is available and the resolution becomes final.

If the mark falls under any of the prohibitions, the RIP will issue an office action, comprising a preliminary rejection. The applicant has four months to respond. If it fails to do so within this timeframe, the RIP will issue a resolution declaring the mark’s abandonment. If the applicant responds but the RIP maintains the rejection, the applicant can file an appeal recourse within 15 working days after the notice has been served.

If the RIP’s resolution is still adverse, the applicant can file a contentious administrative action in newly created courts with jurisdiction in such matters.

The Trademarks Law states that the examining attorney is entitled to declare the application abandoned if six months have elapsed from the date of service of any resolution without the applicant pursuing the next step of the registration process. Abandonment applies on the mere passage of time without action by the applicant.

The sole argument against abandonment is force majeure, which must be proven.

Once an application is admitted for registration, it will be published in the Official Gazette and in a major newspaper.

Opposition

In the two months following publication in the Official Gazette, any party with a legitimate interest can file an opposition. The Official Gazette will apply a cumulative delay to publication of its printed version, which is the valid source for computing legal terms. There is an electronic version of the Official Gazette, available online, which is limited to informative purposes.

No extensions for this action are allowed. The registrar will verify whether the opposition meets all legal requirements; if so, an admission resolution will be issued and served on the applicant, which has two months to respond. After this, the registrar will issue the final resolution within one month.

An opposition procedure takes between eight and 12 months.

Registration

The registration procedure takes between seven and nine months if the application complies with all legal requirements and no office actions or oppositions arise.

The following documents and information must be provided:

  • the applicant’s name, domicile and nationality or state of incorporation;
  • 15 printed labels featuring the mark;
  • a list of the goods or services, and international classes, for which registration is sought;
  • any exclusivity claim of colours, fonts or words;
  • any claim of priority under the Paris Convention; and
  • a power of attorney and corresponding notarial certification duly legalised before the nearest Salvadoran consulate or by apostille. One document per applicant is sufficient. If a power of attorney is granted in a language other than Spanish, it must be translated into Spanish by a translator appointed by a notary public prior to being used before any local authority.

Removal from register

Voluntary cancellation: Any mark can be voluntarily cancelled by its owner, through an administrative process before the RIP.

Judicial cancellation: Cancellation of a trademark can be based on two motives:

  • if a mark was registered contravening Articles 8 or 9 – an action based on Article 8 can also be initiated by the attorney general, and one based on Article 9 must be filed within five years of the registration date; or
  • for non-use, that was abolished in 2002, but reintroduced in 2006 following the implementation of the DR-CAFTA to allow for full or partial cancellation of a mark that has not been used for five consecutive years. Partial cancellation will affect only those goods or services for which the mark is not being used. March 2011 marked the starting point for the filing of cancellation actions for non-use.

Where a mark is cancelled successfully, the prevailing party can take up rights in the mark starting from the filing date of its cancellation claim, but no later than three months following the court’s decision.

A trademark is considered to be ‘in use’ when it is used in relation to:

  • goods or services in commerce;
  • the import, export, storage or transport of goods bearing the trademark; or
  • services originating in El Salvador that are used abroad.

Additionally, advertising the mark through any means is considered use, “even if the goods or services covered are not actually traded” in El Salvador. This provision is useful for foreign rights holders, which can rely on advertising to help to prove use. Rights holders are advised to supplement advertising evidence with commercial invoices, accounting documents or auditors’ certifications that show the amounts and regularity of the goods or services being used in commerce. Defences to non-use include circumstances beyond the power of the rights holder – such as import restrictions – or any other official requirements imposed on products or services covered by the mark.

No filing of proof of use is required on a regular basis.

Judicial cancellation actions must be filed with the civil and mercantile courts. Cases are orally argued by the parties, with the simplest decided in one hearing and the most complex in two. Evidence must be fully filed alongside the complaint and new evidence can be provided only if it refers to new facts. Cancellation procedures now take between six and 12 months. As part of the proceedings, the judge can issue a preliminary injunction ordering that the complaint be recorded at the RIP to prevent the registrant from transferring the disputed mark to a third party.

Once the court has issued its verdict, the RIP will cancel the mark accordingly.

Invalidation: Where a trademark has been incorrectly registered, the law only allows a judicial action to be brought against the registration. There is a five-year statute of limitations for judicial cancellation actions; however, if the registration was sought in bad faith, no such statute applies.

Searches: Official searches are allowed for similar and identical marks, in one or all international classes. A search report includes similar or identical trade names and slogans. Design marks can be searched separately from word marks. The official fee is $20 per mark/design per international class. Searches of all marks that have been applied for or registered by a particular owner are also available; the official fee is $100 per owner.

Enforcement

Complexity

The Trademarks Law provides for:

  • preliminary injunctions;
  • permanent injunctions;
  • civil actions;
  • damages; and
  • actions against unfair competition that affects trademark rights.

The Criminal Code also includes provisions on criminal offences. Accordingly, both civil and criminal remedies are available to deal with the infringement of registered marks. Unregistered marks may be enforced if they are well known. All enforcement actions fall under the courts’ exclusive jurisdiction.

While specialist IP courts do exist, the competent courts will be those with jurisdiction in civil and mercantile matters, as well as the criminal courts if the infringer has committed a felony.

Among other things, a rights holder can request a preliminary injunction ordering:

  • immediate cessation of any infringing acts;
  • the seizure of goods, packaging, labels and other materials bearing the infringing mark, and equipment and materials used to perpetrate the infringement – except for printing presses and accessories and other media, which are protected by the Constitution to guarantee freedom of speech;
  • the suspension of imports or exports of infringing products or materials; and
  • the provision of information by the alleged infringer about persons that participated in the production, sale or distribution of the infringing goods.

A judge can also issue a permanent injunction ordering:

  • the transfer of infringing goods or materials and relevant equipment to the rights holder;
  • any action necessary to prevent the continuation or repetition of the infringement, including the destruction of infringing goods and materials, and relevant equipment;
  • payment of an indemnity for damage suffered; and
  • publication of the final judicial resolution at the infringer’s expense.

Preliminary injunctions may be granted against goods in transit and border seizures. Permanent injunctions can include the destruction of goods seized at the border, as well as the destruction of materials used to manufacture the infringing goods. Infringers are not compensated for any losses in the procedure. The infringing goods can also be donated to charity, subject to the removal of all labels displaying the infringing mark.

Rules relating to damages have been substantially modified. According to DR-CAFTA-influenced provisions, the plaintiff can base its claim on one of the following:

  • damages caused to the rights holder as a result of the infringement;
  • benefits that the rights holder would have obtained if the infringement had not occurred – the court considers the value of the goods or services infringed based on the retail price or through other means that prove their value; or
  • the price or royalty that the infringer would have paid if it had a licence.

The statute of limitations for civil actions is five years from the date of the last infringement. However, if it can be proven that the infringement was committed in bad faith, the statute of limitations does not apply and the infringer can be prosecuted at any time.

Timeframe

Preliminary injunctions may be requested to secure evidence, either before filing an infringement action or as part of it. The judge has the discretion to order the petitioner to post a bond as compensation for damage caused by a failed action. Preliminary injunctions can be requested either as a separate action or with the main enforcement action. They must be granted and executed within 48 hours of filing the action. If the suspension of imports or exports is requested, the plaintiff must file an infringement action within 10 working days (which may be extended once); otherwise, the injunction will be lifted.

The Civil and Mercantile Process Code shortened the duration of a case from between five and six years under the former system to one year for first-instance and appeal proceedings.

Criminal actions are usually more intimidating for the infringer and generally take between two and three months from filing the complaint to the conciliatory audience, following seizure of the infringing goods.

The statute of limitations for unfair competition actions is two years from the date on which the registrant learned of the act of unfair competition or five years from its last performance, whichever expires first.

Ownership changes and rights transfers

It is mandatory to register any changes to a rights holder’s name or domicile, as well as all assignments, for each registration to ensure that the RIP’s information is up to date. These changes can also be recorded against pending applications.

For an assignment, a document must be submitted to the RIP, fully executed in any language. Any foreign text must be notarised and duly legalised before the nearest Salvadoran consulate or by apostille and must be locally translated into Spanish before being filed.

Although the recordal of licence agreements is no longer mandatory, it is desirable to create pre-existing evidence of use. Licence agreements are enforceable before third parties, including infringers and authorities, as long as they are duly legalised and translated into Spanish.

A licence is attributed to the rights holder when an express authorisation to use a mark is granted, with or without limitations, according to the owner’s policy. Licence agreements can only be recorded against registered marks.

Related rights

There are certain areas of overlap between trademark rights and other rights, such as copyright. This occurs mostly in judicial procedures where it is necessary to prove ownership of a right. In such cases, a copyright registration can strengthen the evidence of ownership. A design mark can be protected using copyright if it meets the criteria of artistic creativity and originality. A two or three-dimensional form that can be used for manufacturing a product can also be protected as an industrial design for 10 years.

Online issues

The domain name regulations specifically authorise the registration entity SVNET to adopt dispute resolution procedures based on the UDRP for the ccTLD ‘.sv’.

Romero Pineda & Asociados

Edificio AVANTE, Suite 5-01

Blvd Luis Poma, Santa Elena

Antiguo Cuscatlán, La Libertad

El Salvador

Tel +503 2505 5555

Fax +503 2505 5500

Web https://www.romeropineda.com

José Roberto Romero

[email protected]

José Roberto Romero joined the firm 32 years ago and is currently vice president and managing partner. Specialising in intellectual property, over the years he has consolidated and diversified the services of the IP division. Mr Romero has also held positions in international organisations, positioning the firm as one of the leading IP players in the country. He acts as IP ambassador of the International Chamber of Commerce for El Salvador.

His corporate law practice includes the incorporation and development of foreign companies investing in the country, including over 50 franchising operations. Mr Romero has broad experience of mergers and corporate transformations, and the distribution and organisation of corporate structures.